Backpack, a Solana-based NFT wallet app, announced Tuesday that it will launch a regulated cryptocurrency exchange called Backpack Exchange. The exchange received a Virtual Asset Service Provider license for Exchange Services from the Dubai Virtual Assets Regulatory Authority (VARA).
VARA, which oversees virtual asset operations in Dubai, granted the license after a “rigorous” review process, a VARA spokesperson said. The spokesperson said in a statement that Backpack Exchange “needs to be recognized [its] commitment to prioritizing investor protection and risk insurance.”
Coral is the company behind the Backpack app, the Solana-based xNFT (or “executable NFT”) standard for NFT-based apps and experiences, and the prominent Mad Labs profile photo collection (PFP) on Solana.
Mad Lads gave Solana NFTs a ‘new heartbeat’ after losing DeGods: Coral CEO
Backpack Exchange has yet to open to the public, but Coral said in a release that it has been in development for five months and is built around technologies such as zero-knowledge proof of reserves and multi-party computation (MPC). The VARA license only applies to Backpack Exchange, not to other services and features within the Backpack app.
Sign up for the waiting list https://t.co/44tITBLJSA 🎒 https://t.co/Wy5zQQLLum pic.twitter.com/aTE9FqmyJ3
— Backpack 🎒 (@xNFT_Backpack) October 31, 2023
“It should not be normal to use an exchange with a single point of failure, without evidence of reserves or without auditability,” Armani Ferrante, founder and CEO of Backpack, said in a press release. “Backpack Exchange hopes to raise the bar for transparency and compliance to demonstrate the best this technology has to offer. Don’t trust, verify.”
Ferrante’s comments follow Coral’s experience with collapsed crypto exchange FTX, which closed in November 2022. Coral had $14.5 million in investment funding (out of $20 million raised) on the platform at the time it closed, which remains inaccessible to the founders. That amount included $10 million from FTX Ventures.
Backpack Exchange will initially launch in November as a private beta for members of Coral’s existing Backpack and Mad Lads communities. It plans to open to the general public in the first quarter of 2024. The exchange will start with spot trading of cryptocurrencies and later expand to derivatives, margin trading and more as Backpack obtains additional licenses worldwide, the release said.
Editor’s note: This article was written with the help of AI. Edited and fact-checked by Andrew Hayward.
